SMEs as the Unknown Stakeholder

Entrepreneurship in the Political Arena

Massimiliano Di Bitetto, GianMarco Gilardoni, P. D'Anselmi

• Publisher: Palgrave Macmillan
• Year: 2013
• ISBN:
  9781137331205
• Topic: Business
• Subtopic: Management
• Index: Business

Investigates how and to what extent the self-employed and micro-enterprise workers canbe represented in the social arena. A cross-sector approach to responsibility for government as well as private businesses.

Part I

The Ordinary World of Trade Unions

1

The Self-Employed as the Unknown Worker

Massimiliano Di Bitetto, Gianmarco Gilardoni and Paolo D’Anselmi

1.1 The marginal status of SMEs in the social dialogue

The workers we recognize in social dialogue are the usual suspects: government workers and those employed in monopolies, in the banks and in large corporations. The self-employed and micro-enterprises (as well as small and medium enterprises, SMEs) have a marginal status in the social dialogue: hence the funding of research to work out representation possibilities for the unknown workers of today: the self-employed and the workers in micro-, small and medium enterprises (MSMEs).

Actors in the social dialogue are not a representative sample of the workforce or of wider society. They are a sample biased in favour of the stronger categories: large corporations (on the side of business) and large trade unions (on the side of labour), the latter representing mostly government employees and workers employed in large corporations. Other employees and workers (including the self-employed and the micro-entrepreneurs) are marginalized when it comes to short-term lobbying and tactical skirmishes over tax regulations. The big players are indeed hegemonic in society. Our focus is on the unrecognized self-employed, including the micro-entrepreneur with less than 10 employees (a small enterprise is defined as less than 50 employees). Thus we will be talking about MSMEs: micro-, small and medium enterprises, according to the World Bank definition (Kozak, 2007).

MSMEs need a vision. They are marginal in the political arena, fighting a rearguard action for ‘fiscal reform’ to clean up the social stigma of tax evasion, notwithstanding the fact that, at the same time, they pay the income taxes of their employees. They are united under no flag and have no defining, unifying ethos.

Fiscally, MSMEs exist in a permanent ‘Cinderella state’. They are perceived as, alternatively, a weakness or a strength of society and the economy. They are responsible for little technological innovation. However, they do make a great deal of effort to serve local communities. And every human being is, ultimately, resident in a local community. MSMEs are often considered within the framework of ‘business and community’, which is a credo that needs to be elaborated; as ‘social shock absorber’ their role deserves appropriate analysis and development. These key words are good analytical tools, but they lack charisma and visibility; they lack that sense of scandal and novelty that ‘competition’ may bring to the political debate.

According to a significant study by Eurofound (see below), ‘practically no business representation exists as such for self-employed workers as own-account workers without employees. Rather, they have essentially to refer to professional associations, small and medium-sized enterprises (SMEs) or general employer associations, as well as to public representation bodies, such as the Chambers of Commerce.’

The result is that the self-employed end up as the unknown workers of European economies.

1.2 The non sequitur of current trade union policy: between goal and tactics

1.2.1 The Eurofound study

The subject of our research is the representation of the self-employed and micro-enterprises. An important publication is the study by Roberto Pedersini, Diego Coletto and Christian Welz, Self-employed workers: industrial relations and working conditions (European Foundation for the Improvement of Living and Working Conditions, 2010), hereafter the Eurofound study, Eurofound or Pedersini et al. Therefore, we begin this book with a discussion of two of their key points underlying work in the area of worker representation: the ultimate goal of representation; and the tactics negotiation.

We must admit one limitation of our study here, which is better specified in Eurofound: when speaking of the self-employed and of micro-enterprise, Both trade unions and business associations should be considered in any discussion of the self-employed and micro-enterprises, the distinction between the two referring merely to the constituency they represent. The wording of our own initial study proposal did not include business associations, although the distinction is clearer in Eurofound. While a trade union is more employee-oriented, a business association is entrepreneur-oriented. In the case of the self-employed, this distinction does not exist, as employee and entrepreneur tend to be one and the same. We can also make a distinction based on the negotiation point. A trade union represents workers vis-à-vis entrepreneurs; a business association represents workers vis-à-vis government.

1.2.2 The ultimate goal of representation: economic growth

In the Eurofound study the ultimate goal of representation is defined after the policy points are introduced. Pedersini et al. provide the following four policy points (Eurofound, 2010, p.3):

1. In order to lessen the association between self-employment and the informal economy, as well as eliminate bogus self-employment, stricter enforcement of existing regulations and the development of new tools to face irregular situations, with the active involvement of the social partners, could constitute a timely and adequate policy response.
2. Recent market deregulation policies have enabled more people to enter specific activities as self-employed workers, thus contributing to employment creation and economic growth. Nonetheless, it is important to ensure that such business-friendly policy measures are not introduced to the detriment of adequate economic rewards and social security protection.
3. As Spain has done in recent years, other Member States could take steps to support policies to bring the conditions for self-employed workers closer to those of employees with regard to maternity and parental leave.
4. Problems associated with some characteristic features of self-employed workers — low earnings, discontinuous work, low skills, long and non-standard working hours, the high incidence of industrial accidents and work-related health problems — require comprehensive measures at national and EU levels. Such policy measures should include welfare provisions, training initiatives, business support services and the promotion of collective representation, where appropriate, with a relaxation of competition rules. Policies in this regard would support the creation of more and better self-employment opportunities.

It should be noted that these problematic combinations represent the weakest areas of self-employment. Eurofound concludes:

Such measures, however, should be clearly defined, in order to maximize the use of resources and avoid more wide-ranging measures that would almost inevitably be of limited impact. This again highlights the crucial contribution that further and more focused research can give to the development of policies to support the improvement of working and employment conditions of self-employed workers, as well as to strengthen their contribution to more sound and sustainable economic growth – in other words, to create more and better self-employment opportunities.

We take these last words as the defining measure of worker representation: economic growth and employment. This strategic goal appears that much more important in the wake of the economic crisis that began in 2007 and is still present throughout the world, especially in the countries represented on the panel working on this study.

1.2.3 The tactics of representation: pay and benefits

This discussion of the Eurofound study aims to identify and conceptualize and identify the ‘scope of representation’. Pedersini et al. foreground this notion, which is often taken for granted; identify (albeit implicitly) a taxonomy of the possible methods of representation; and present best reported practices. In the first section of their Chapter 5, they state: ‘Trade unions traditionally organize self-employed workers in some quite specific professions characterized by high skills and significant autonomy in the performance of their work, such as journalists and performing artists’, and ‘They are hired on standard employment contracts and trade unions essentially try to regulate such standard contracts’ (Eurofound, 2010, p.39). This is the first definition of the remit of trade unions.

The study shows awareness of the ‘scope of representation’ and conceptualizes it thus:

Another sector with a high incidence of self-employed workers and where trade unions often have an established representation is construction. In transport, especially in road haulage, the situation is more mixed, but trade associations seem to prevail, even if there are recurrent debates on ...

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of Figures and Tables
• Foreword by Lez Rayman-Bacchus
• Foreword by Jacob Dahl Rendtorff
• Acknowledgments
• Notes on the Contributors
• List of Abbreviations
• Introduction
• Part I: The Ordinary World of Trade Unions
• Part II: Best Practice from the Field
• Part III: Learning from Experience
• Part IV: Entrepreneurship in the Political Arena
• Bibliography
• Index